U.S. v. Jenkins, Nos. 84-1267

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: Before GOODWIN, NELSON and CANBY; CANBY
• Citation: 785 F.2d 1387
• Docket Number: 84-1268 and 84-1281,Nos. 84-1267
• Decision Date: 27 March 1986
• Parties: 20 Fed. R. Evid. Serv. 192 UNITED STATES of America, Plaintiff-Appellee, v. Marvin JENKINS, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Ross PROCK, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Rich WHITE, Defendant-Appellant.

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785 F.2d 1387 20 Fed. R. Evid. Serv. 192 UNITED STATES of America, Plaintiff-Appellee,
v.
Marvin JENKINS, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Ross PROCK, Defendant-Appellant.
UNITED STATES of America, Plaintiff-Appellee,
v.
Rich WHITE, Defendant-Appellant. Nos. 84-1267, 84-1268 and 84-1281. United States Court of Appeals,
Ninth Circuit. Argued and Submitted Nov. 14, 1985.
Decided March 27, 1986.

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Barbara A. Corprew, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Thomas F. Pitaro, John P. Fadgen, Patrick C. Clary, Lorraine Mansfield, Las Vegas, Nev., for defendants-appellants.

Appeal from the United States District Court for the District of Nevada.

Before GOODWIN, NELSON and CANBY, Circuit Judges.

CANBY, Circuit Judge:

This case arises from a scheme to obtain by fraudulent means financing insured by the Federal Housing Administration (FHA) under the Title 1 Mobile Home Loan Program. The government alleged that, by altering and inflating manufacturer invoices and by bribing employees of Sherwood & Roberts (S & R), an FHA-insured lender, appellants Marvin Jenkins, Ross Prock and Rick White sought to obtain government-insured financing for mobile homes they were selling through Young American Mobile Home Sales of Las Vegas, Nevada. Appellants were stockholders, officers and employees of Young American.

The bribes, in the form of kickbacks of several hundred dollars for each loan processed, were intended to facilitate easy loan approval by S & R. By altering manufacturer invoices, Young American could secure for its customers insured financing for "extras" not normally permitted under Title 1 guidelines.

Appellants were tried on an indictment that charged thirteen counts of making false statements to obtain loans insured by the FHA, 18 U.S.C. Sec. 1010 (1982), and one count of conspiring to defraud the government by such statements, 18 U.S.C. Sec. 371 (1982). A jury found all three guilty of conspiracy and Prock guilty on four false-statements counts. They appeal on various grounds. We affirm.

I. PROOF OF FEDERAL INSURANCE

Appellants contend that their convictions should be reversed because the government failed to prove the existence of a contract of insurance between S & R and the FHA, as alleged in the indictment. The existence of federal insurance, they argue, is an essential element of a Section 1010 offense (or conspiracy to violate Section 1010), without which the trial court lacks subject matter jurisdiction. The issue is one of first impression in this and all other circuits.

A. Construction of Section 1010

Section 1010 ¹ prohibits making false statements in loan transactions involving

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the Department of Housing and Urban Development (HUD). The statute is invoked here because FHA is a HUD agency.

Appellants contend that the language of Section 1010 mirrors that of 18 U.S.C. Sec. 1014, which punishes false statements to "any bank the deposits of which are insured by the Federal Deposit Insurance Corporation...." Because proof of FDIC insurance is an essential element of a Section 1014 charge, see United States v. Platenburg, 657 F.2d 797, 799 (5th Cir.1981), appellants argue that, by parallel reasoning, proof of insurance should also be an element of a Section 1010 charge. The existence of federal insurance, they argue, is what makes the offense a federal one.

The government disagrees. It argues that, while direct proof of FHA insurance is relevant, it has never been held necessary to a Section 1010 violation. The cases cited by the government, however, are not conclusive. Most of the cited cases deal with the ephemeral issue of intent in these cases; while they do not hold proof of insurance to be an element of a Section 1010 violation, they do not reject it as one either. See, e.g., United States v. Barbato, 471 F.2d 918, 921-22 (1st Cir.1973); United States v. Leach, 427 F.2d 1107, 1111 (1st Cir.), cert. denied, 400 U.S. 829, 91 S.Ct. 57, 27 L.Ed.2d 59 (1970); Brilliant v. United States, 297 F.2d 385, 389 (8th Cir.), cert. denied, 369 U.S. 871, 82 S.Ct. 1140, 8 L.Ed.2d 275 (1962).

Section 1010 is composed of several operative clauses written in the disjunctive. False statements made in several different contexts can trigger its application. It is therefore important to our decision to determine which clause was invoked.

The indictment alleges that appellants violated the first prohibition mentioned in Section 1010, that of false statements "for the purpose of obtaining a loan or advance of credit ... with intent that the loan or advance of credit shall be offered to or accepted by [HUD] for insurance...." We conclude that proof of government insurance is not an element of this offense. ²

The statute makes clear that the prohibited false statement can be made to "any person, partnership, association, or corporation;" an FHA-approved lender is not required. All that must be shown is that a defendant knowingly made a false statement on a document intended to be "offered to or accepted by" HUD for insurance. It is the defendant's intent to mislead the government, no matter how or through whom that deception is accomplished, that is in issue. There is no requirement that any intermediary be covered by existing insurance.

The plain language of Section 1010 is quite different from that of Section 1014. In Section 1014 cases, the focus is quite properly on the party to whom the false statement was made. A person violates that part of Section 1014 relied on by appellants only if a false statement is made to an FDIC-insured bank. But, as we have said, no such requirement exists under Section 1010. The false statement may be made to anyone; it is the intent behind the statement that is in issue. ³

B. Subject Matter Jurisdiction

The argument that government insurance must be proved to support federal subject matter jurisdiction is also flawed. In light of Congress's plenary power to regulate interstate commerce, see, e.g., Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 195, 6 L.Ed. 23 (1824), it is beyond dispute

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that Congress may declare it a crime to make false statements with intent to obtain a government-insured loan. The district court accordingly had jurisdiction under 18 U.S.C. Sec. 3231.

C. The Indictment

Our conclusion that proof of federal insurance is not an essential element of the offense charged does not end our inquiry, however. The indictment recites allegations that S & R held an insurance contract with the government and that the contract dictated the rights and obligations of S & R and the government in this matter. ⁴ Appellants argue that the government offered insufficient proof of these allegations, necessitating reversal of their convictions. We reject this contention.

As our cases have held, an indictment must provide a defendant with a description of the charges against him sufficient: (1) to enable him to prepare his defense; (2) to ensure him that he is being prosecuted on the basis of facts presented to the grand jury; (3) to enable him to plead double jeopardy against a later prosecution; and (4) to inform the court of the facts alleged so that it can determine the sufficiency of the charge. United States v. Bohonus, 628 F.2d 1167, 1173 (9th Cir.), cert. denied, 447 U.S. 928, 100 S.Ct. 3026, 65 L.Ed.2d 1122 (1980); see also United States v. Christopher, 700 F.2d 1253, 1257 (9th Cir.), cert. denied, 461 U.S. 960, 103 S.Ct. 2436, 77 L.Ed.2d 1321 (1983).

The cases make clear that the government need not prove all facts charged in an indictment; instead, only enough facts to prove the essential elements of the crime must be demonstrated at trial. United States v. Hughes, 766 F.2d 875, 879 (5th Cir.1985); United States v. Archer, 455 F.2d 193, 194 (10th Cir.), cert. denied, 409 U.S. 856, 93 S.Ct. 135, 34 L.Ed.2d 100 (1972). Insofar as the language of an indictment goes beyond alleging elements of the crime, it is mere surplusage that need not be proved. United States v. Greene, 497 F.2d 1068, 1086 (7th Cir.1974), cert. denied, 420 U.S. 909, 95 S.Ct. 829, 42 L.Ed.2d 839 (1975); Gawne v. United States, 409 F.2d 1399, 1403 (9th Cir.1969), cert. denied, 397 U.S. 943, 90 S.Ct. 956, 25 L.Ed.2d 123 (1970).

The inclusion of surplusage must not be allowed to prejudice a defendant in the context of his case. United States v. Aguilar, 756 F.2d 1418, 1423 (9th Cir.1985). But appellants here make no claim that the indictment failed to inform them fully of the charges against them or that they were otherwise prejudiced by the allegations of government insurance. Nor could they, on these facts.

As we have held, proof of federal insurance is not an essential element of the crimes charged here. To the extent that the indictment included allegations that appellants' false statements were directed to an FHA-approved lender, the language was surplusage that did not have to be proved at trial. Its inclusion was harmless.

II. USE OF WHITE'S CIVIL DEPOSITION

White and Jenkins argue that their convictions should be reversed because the trial court improperly admitted deposition testimony that White gave in a civil action arising out of the same facts. The testimony was damaging because in it White acknowledged that Young American's financing arrangment with S & R constituted "federal fraud."

A. White's Claim

White argues that use of this deposition violated his fifth amendment privilege

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against self-incrimination where, as here, he did not testify in his own behalf at his criminal trial.

This claim is frivolous. The fifth amendment privilege is not ordinarily self-executing and must be affirmatively claimed by a person whenever self-incrimination is threatened. Minnesota v. Murphy, 465 U.S. 420, 429, 104 S.Ct. 1136, 1143, 79 L.Ed.2d 409 (1984). An individual may lose the benefit of the privilege inadvertently, without a knowing and intelligent waiver. Garner v. United States, ...